Three of the Bakken’s biggest hitters say the play is here to stay and estimates of 1 million barrels of oil a day and 1 million people here in just a few years are not off the chart.
Top executives from Continental Resources, Whiting Oil and Gas and Marathon Oil were headliners Thursday the final of the three-day Williston Basin Petroleum Conference.
The conference broke its own record with 4,300 people thronged into the Bismarck Civic Center just like oil production sets new milestones every month and towns keep filling with more new workers.
Continental’s president, Harold Hamm, said he thinks the state will hit 1 million people due to the Bakken development and that the state won’t feel crowded when it does.
“A million people spread out over this state is not going to seem very populated,” Hamm said.
The state’s population is estimated at 683,932 and oil production is 575,000 barrels a day as of last month.
Both Continental and Whiting say the boom will keep rolling while they tap production in relatively new zones of the Bakken formation, zones they refer to as “benches” and “sands” that are saturated with crude from the Bakken source.
Continental — a leader in prognosticating Bakken oil reserves — said it now believes there is as much as 27 billion to 45 billion barrels of oil recoverable from the Bakken based on production from two previously untapped bench zones in the resource.
Whiting’s chief executive officer, Jim Volker, said his company is going there, too, by developing a new field between Dickinson and Belfield called the “Pronghorn area,” in the Pronghorn sands.
Volker said the Pronghorn sands are between the Bakken shale and the Three Forks and that he expects 500 wells will be drilled in the Dickinson to Belfield region, its deepest probe into southwestern North Dakota. It has 30 wells there now.
“We’ll have seven to
10 rigs there for the next couple of years,” he said.
To find what he calls “Bakken sweet spots,” Volker said, his company relies increasingly on microscopic analysis of core samples to evaluate how porous, saturated and permeable formations are.
He said his company is experiencing the best financial returns in its history and reaches payout on a $7 million well in less than a year. Wells in new exploration areas take up to a year longer to pay out.
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“What we’ve found in our Pronghorn area is every bit as good as the Sanish (field near Parshall) was,” Volker said.
He said his company has maintained a low debt profile so it can weather drops in the price of oil.
Hamm said he still believes the region should expect to see 250 rigs drilling, though the rig count has plateaued in recent months at around 200 to 210 rigs.
He said his company will look for cost efficiencies by increasing the number of pad locations. Those are larger pads from which several wells are drilled.
Owners of oil field construction companies might have to fly “smaller jets” while his company goes into a more cost-efficient mode, Hamm said.
He said he’s bothered by the $15 per barrel differential between Bakken crude and other oil caused by transportation bottlenecks.
“What we need is pipeline to get oil to water so we can export it. People ask me which pipeline I support and I say I’m going to support all the pipelines to get rid of that differential,” Hamm said.
He said his company has gotten around the crux of not having enough workers. “This will be here a long time and people will be migrating here,” he said.
Marathon’s top executive, Dave Roberts, said he felt like the lightweight next to two Bakken heavyweights, though he, too, is proud of the Bakken contribution to the country’s increasing oil self-sufficiency.
“People in Alaska and California (states bypassed by North Dakota’s growing production) have to be asking, ‘Where did that train come from?’” Roberts said.
He said six years ago his company was in temporary offices with no employees and now has offices in Dickinson, Dunn Center and New Town, 100 employees and 300 wells.
He said oil developers and the communities are at an important intersection of time and place and that it’s important for companies to be good neighbors where they’re operating.
“We’re well aware of the challenges at this critical moment in time,” Roberts said. “We don’t like all the trucks on the road either and we ask ourselves how we can change our operational footprint so we can reduce the number of trucks.”
He said North Dakota is a learning laboratory for oil development here and in other states. “North Dakota is helping lead the way,” Roberts said.